Finding Text
Assistance Listing, Federal Agency, and Program Name - 15.916, U.S. Department of the Interior, Outdoor Recreation, Acquisition, Development and Planning
Federal Award Identification Number and Year - FAIN not available, 2024
Pass through Entity - Colorado Parks and Wildlife/Land and Water Conservation Fund
Finding Type - Material weakness and material noncompliance with laws and regulations
Repeat Finding - No
Criteria - Per 29 CFR 5.5, all laborers and mechanics employed by contractors or subcontractors to work on constuction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor. Nonfederal entities must include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with those requirements and the DOL regulations.
Condition - The City did not have controls in place surrounding the review of contracts and bid documents and omitted the prevailing wage rates provisions from the construction contract it entered into that was financed by the federal award.
Questioned Costs - None
If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported - Not applicable
Identification of How Questioned Costs Were Computed - Not applicable
Context - The City incurred expenditures during the year under audit under one contract related to this federal award that was subject to the wage rate requirements.
Cause and Effect - The City did not have a process in place to review the contract to ensure it was in compliance with the requirements of the federal award and, therefore, the required clauses were omitted from the contract and the City was not in compliance with the regulation; however, it did obtain and review the required weekly payroll reports to ensure prevailing wage rates were paid.
Recommendation - We recommend the City review all contract and bid documents to ensure they are in compliance with all federal laws and regulations.
Views of Responsible Officials and Planned Corrective Actions - The City accepts this finding. The City did have internal policies in place to ensure compliance with federal wage requirements. However, the project was bid and awarded prior to receipt of any grant funding, so the prevailing wage rate requirements were not included in the contracts. While unintentional, the contract requirement was not followed but was complied with in practice. The City will require an amendment to the contract to include ensure the prevailing wage requirement is included. See the corrective action plan.